Long overdue update:
The realestate.com.au activity test shows Frankston , Frankston North and Frankston South at what I would consider moderate activity levels compared to past few months, (Frank 51 prop sold out of 200 listed, 13/35 for Frank nth and 20/130 for Frank Sth).
I caught up with proprietors of the largest 4 agencies in Frankston to get their feedback on the market in recent months.
All 4 proprietors mentioned that they are very short of sale stock and the high proportion of properties available for sale that appear on realestate.com.au website is due to the fact that majority of properties sold (40+) in auctions on the last few weeks are still appearing as available, a large number of unfinished or pre-sale townhouses/ units stock and some sellers with unrealistic price expectations for their properties.
Aaron Frolling owns the largest agency MPRE with 3 offices in Frankston. He tells me that MPRE had November as their best ever month in the number of properties sold and had outstanding results over the last few auctions held.
A major auction that MPRE conducted at a local hotel had 7 out of 8 properties sold. This is very rare considering that Frankston had less than 2% of properties going to auction at the start of this year.
He believes there is a serious lack of stock in the market and most of the properties that are priced at current market level get sold within a day or two.
The townhouse and units market which in Frankston had been lagging behind the house market has turned the corner and is showing good results, both in activity and the price points realized.
The development at the corner of Yuille and Denbigh St (just finished) had 2 townhouses sold by MPRE recently. A 2 bedroom 13 sq + garage sold for $380k and the 3 bed 17 sq + garage sold for $450k.
http://www.realestate.com.au/cgi-bi...eader=&c=65456511&s=vic&snf=ras&tm=1197458093
Lifestyle choice – Frankston beachside:
A new trend is in the full swing with a number of properties being sold to home buyers currently in inner suburbs. It is in my opinion quite remarkable and very instrumental for gentrification process in that, that besides the affordability or investment potential, home buyers would choose this area in order to improve their lifestyle. Aaron mentioned that a number of buyers that he personally dealt with sold their ppor in the blue chip suburbs of Prahran, Collingwood, Hawthorn and Camberwell to buy their dream house in beachside Frankston.
With the eastlink expected to open in 6 months, major developer activity and announcements like St Kilda FC moving to Frankston, it has given a fresh impetus to the local investing market.
Andrew Gillespie that owns the second largest Frankston real estate agency Hocking Stuart is equally bullish about the activity levels. Nov was their second best month in the number of properties sold which he thought was remarkable considering the election and 2 rates rises. Like Aaron from MPRE, he sees the market being very strong with 5 put of 6 prop sold in the auctions they held last weekend. The weekend before all 5 prop brought to auction were sold.
Unlike at the start of this year, almost 90% of the investors are from Melbourne in his opinion and are paying record prices for good quality properties.
No 5, The Range sold for over a million dollars expected to fetch around $900k.
110 Fleetwood Cres had a reserve of $395k and sold for $455k.
A very small block of land (234 sqm) in Orchard gve with a reserve of $110k sold for $175k.
117 Woodside Ave went for $525k and 10 Tara dve sold for $432k.
The rental market in Frankston has definitely turned the corner with a relative shortage of rental stock. All of my properties that I have owned for over 6 months in Frankston have had the rents increased by between 6% and 10%.
Andrew hasn’t seen any dampening of activity levels either during election or with the rate rise.
My personal opinion is that the activity levels have dropped compared to their peak around June/ July this year and the growth in the values is not as steep as it was earlier this year.
Andrew Milne from Andrew Milne R E gave similar feedback. Out of all the agents in Frankston, he is the most conservative and has a very realistic view on the market. He believes that based on the current month activity levels, Dec might be their busiest month this year. The interest rates haven’t had any effect on his sales activity however he sees market slowing down around Christmas.
He sees the rental market as being the strongest ever and his agency is in short supply for new rental stock.
Chris Wong from Stockdale & Leggo is another agent complaining about a serious lack of available properties and is down to his last few listings. Being overly bullish, he termed the local market as being relatively clam compared to the levels of activity and values once the freeway is finished in 6 months..!
Driving down around Frankston central and Frankston Sth, the amount of new building activity is astounding compared to only 6 months ago. The appearance and quality of the dwellings is what one would expect in inner blue chip suburbs. Construction for multiple developments dotted along the beachside on Nepean Hwy and Frankston South is in full swing and should finish in the next few months. I am expecting the local landscape to change significantly in the next 12 months.
So overall, whilst I won’t claim to be truly objective with my vested interests, I see a temporary lull around Christmas and the activity level picking up very seriously around Feb next year (similar to earlier this year). Around that time, the freeway would be almost finished along with a couple of new projects that the council aims to announce to improve the Frankston CBD, Kananook creek and perhaps the long awaited Frankston marina..!
Cheers
Harris
